This article will reflect on the compensation paid to Dean Taylor who has served as CEO of Diamcor Mining Inc. (CVE:DMI) since 2007. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Diamcor Mining
Comparing Diamcor Mining Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Diamcor Mining Inc. has a market capitalization of CA$5.6m, and reported total annual CEO compensation of CA$377k for the year to March 2020. Notably, that's an increase of 20% over the year before. We note that the salary portion, which stands at CA$302.5k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under CA$253m, the reported median total CEO compensation was CA$150k. This suggests that Dean Taylor is paid more than the median for the industry. Moreover, Dean Taylor also holds CA$128k worth of Diamcor Mining stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | CA$302k | CA$316k | 80% |
| Other | CA$75k | - | 20% |
| Total Compensation | CA$377k | CA$316k | 100% |
On an industry level, roughly 93% of total compensation represents salary and 6.8% is other remuneration. Diamcor Mining sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Diamcor Mining Inc.'s Growth Numbers
Diamcor Mining Inc. saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 49%.
A lack of EPS improvement is not good to see. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Diamcor Mining Inc. Been A Good Investment?
With a three year total loss of 80% for the shareholders, Diamcor Mining Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As previously discussed, Dean is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which are a bit concerning) in Diamcor Mining we think you should know about.
Switching gears from Diamcor Mining, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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About TSXV:DMI
Diamcor Mining
A junior mining and exploration company, identifies, acquires, explores, evaluates, operates, and develops diamond-based resource properties.
Medium-low with weak fundamentals.
